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High input costs could put the damper on biodiesel growth in 2008, despite the fact that demand for the green fuel will grow. But the long-term outlook still looks pretty positive.

This story from Reuters says that assessment comes from the head of the industry’s largest trade group:

“The economics overall for the biodiesel industry are extremely challenging right now. There’s no question about it there’s been a cooling off what has been some irrational exuberance that has gone on in the investment in biodiesel production capacity over the last two years,” Joe Jobe, CEO of the National Biodiesel Board, told the Reuters Global Agricultural and Biofuels Summit in a telephone interview.

Domestic biodiesel margins are running about 10 cents per gallon to a minus 30 cents per gallon, industry analysts said.

The article goes on to point out that biodiesel production in the U.S. went from 25 million gallons a year in 2004 to 450 million gallons in 2007… pretty impressive growth. This year, biodiesel production is expected to hold steady at current levels. But with the passage of the new energy bill, biodiesel production could jump by five times over the next 15 years from what it currently is. Jobe says by 2015, his industry wants to replace 5 percent of the U.S. diesel pool with biodiesel… upping production to 1.85 billion gallons.

A Galveston, Texas biodiesel plant that looked like it was done after oil giant Chevron backed out of a deal to expand operations, now looks like it is back to expanding its efforts.

This story in the Houston Chronicle says Galveston Bay Biodiesel will spend $15 million to do some improvements and settle legal claims against it after Chevron left the project high and dry last year:

Galveston Bay Biodiesel, the partnership that owns the plant, said the money is coming from one of the original investors in the project but did not identify the investor.

Other money will go to finish some modifications and expansions of the plant, which the partnership contends were halted last year when Chevron decided not to invest more money in the project.

The article says Chevron claims it was in the deal just to get things started, but the partnership says Chevron breached its agreement and misrepresented itself to up its part in the plant. The Chevron infusion was suppose to help the plant go from 20 million gallons a year to 100 million. This new investment should help the plant expand to 40 million gallons a year.

In less than a month, biodiesel producers, users, and enthusiasts will gather in sunny Orlando, Florida for the National Biodiesel Board’s 2008 National Biodiesel Conference & Expo.

The event is touted as the “largest and most comprehensive event in the history of the biodiesel industry.” This press release from the NBB says Florida has become a natural place for biodiesel with NASA, the Orlando International Airport, Universal Studios, and Florida Power & Light using the green fuel and two new biodiesel plants in the Sunshine State:

The National Biodiesel Board (NBB) hosts the fifth annual conference February 3 – 6 at the Gaylord Palms Resort & Convention Center in Orlando. A record 4,000 people are expected to attend. The conference is sure to enrich attendees with world class sessions and speakers during what promises to be a year full of changes for the industry.

“The biodiesel industry is at a turning point,” said Donnell Rehagen, NBB Chief Operations Officer and conference director. “The future of the industry depends on cooperation, coordination and a strategic approach to the changing landscape which provides both opportunities and challenges. This conference will provide the platform from which to launch our course for the future.”

Just like last year, Domestic Fuel will be there, covering all the events. You can stay up-to-date with the latest information at the 2008 National Biodiesel Conference & Expo blog.

Seattle-based biodiesel giant Imperium Renewables seems to be hitting some tough times lately.

The latest news from the Seattle Post-Intelligencer says the company is laying people off:

The Seattle biodiesel producer, which employed 107 people in mid-August, did not provide specific numbers. It issued this short statement when asked about the layoff by the P-I’s Andrea James.

“Imperium Renewables has reduced its corporate workforce. The move is part of an ongoing restructuring plan that realigns the company to address short term challenges and ensure the company’s long term growth. These changes do not impact production of biodiesel at Imperium Grays Harbor.”

This news comes on the heels of last week’s postponement of the company’s initial public offering (see my Jan. 3rd post) and chief executive Martin Tobias either leaving or being told to leave the company last month (see my Dec. 27th post).

There’s not a lot of information on why all of this is happening right now for Imperium, but speculation is that rising feedstock prices, including soybean oil, is putting the squeeze on the company.